On Tuesday gold edged lower, as global equity markets and the
U.S. dollar regained ground after a grinding drop in the prior session.
Comex gold futures
for December delivery shed $5.00, or 0.43%, to trade at $1,148.60 a troy ounce during
European morning hours, before settling at $1,149.90 /oz.
On Monday gold rallied to $1,169.80, the strongest level since July 7, before losing ground to end at $1,153.60.
Germany's DAX rallied 3% on Tuesday, while France’s CAC 40 and London's FTSE 100 were both up around 2%, one day after suffering their worst selloff in nearly seven years.
Today’s European rally is good news for investors (unless they ‘shorted’ the market), but it doesn’t change the fundamental problems in the global economy, the Guardian says.
Nour Al-Hammoury, ADS’s chief market strategist, explains: "We have global deflation, concerns over the strength of the Chinese economy and an overheated equity market."
The market is facing “a trust issue”, in his opinion, and looking to central banks to throw another lifeline.
"A single intervention by any of the Central Banks is now likely to be of little use – there will need to be a coordinated response."
Meanwhile, U.S. stock futures regained more than 3%, providing signs that Wall Street will open stronger later in the day, as markets begin to recover from sharp losses the previous day.
In the currency market, the greenback gained against the euro and yen early Tuesday, recovering somewhat after getting beaten up by those big rival currencies in the prior session.
The ICE U.S. Dollar index was up 0.4% to 93.66 after slumping 1.7% on Monday. For the week, it’s still down 1.2%, but up 3.7% for the year so far.
The euro was down 0.71% to $1.1536 on Tuesday. Meanwhile, the dollar climbed 1.06% to 119.66 yen. On Monday, the Japanese currency benefited from haven demand as stocks plunged worldwide.
